The chip industry is facing growing pressure from rising costs and intense competition, prompting major players to rethink their strategies. In response, many industry leaders are turning to mergers and acquisitions (M&A) as a way to boost competitiveness, expand market share, and strengthen their overall position. According to Core Power, the next decade may see a shift from horizontal integration toward vertical integration, where companies will seek to control both upstream and downstream operations. This trend is expected to significantly amplify the benefits of M&A, leading to stronger manufacturers, higher industry concentration, and a more consolidated oligopoly structure.
One of the most notable shifts in the industry occurred in 2017 when Samsung overtook Intel as the world's largest chipmaker. For years, Intel had held that title since 1992, but Samsung’s $69 billion chip business outperformed Intel’s $63 billion, marking a significant change in the landscape. Samsung's success can be attributed not only to its diverse product portfolio but also to the recent rise in storage prices, which gave it a strategic advantage.
Samsung’s journey to dominance in memory chips began in the early 1990s when Japanese firms dominated the sector. Samsung entered by licensing patents from Japanese companies and gradually expanded its presence. It also became a key contract manufacturer for Qualcomm, one of the top semiconductor firms, further solidifying its position in the industry.
While Samsung has successfully used M&A to grow, it is not the only player pursuing this strategy. A high-profile example was Broadcom’s failed attempt to acquire Qualcomm in 2017. The deal was ultimately blocked by U.S. President Trump on national security grounds, but it highlighted the potential impact of such a merger. If completed, it would have created a dominant force in smartphones, set-top boxes, and wireless chips, reshaping the global semiconductor landscape.
Intel itself had considered several acquisition strategies, including a bid for Broadcom, as a countermeasure against the proposed Qualcomm takeover. Core Power suggests that Broadcom may continue to pursue smaller, less controversial deals, with memory and semiconductor equipment firms as likely targets.
The M&A boom in the chip industry has been ongoing since 2015, with increasing transaction sizes despite a drop in the number of deals. In 2014, there were 369 M&A cases totaling $37.7 billion, while in 2015, the number of deals dropped to 276, but the value of individual transactions surged. The total M&A volume exceeded $60 billion in 2015, nearly doubling the previous year. Notable deals included Avago’s $37 billion acquisition of Broadcom, which created a $77 billion company.
The trend continued into 2016, with SoftBank acquiring ARM for £23.4 billion, becoming the second-largest semiconductor acquisition at the time. Just three months later, Qualcomm broke the record by purchasing NXP for $47 billion, marking the largest chip M&A deal to date.
In 2018, Microchip Technology acquired Microsemi for $8.35 billion, aiming to enhance its capabilities in aerospace, defense, and data center applications. These transactions reflect a broader industry trend: as performance growth slows and costs rise, chip companies are turning to M&A to survive and thrive.
Core Power predicts that the semiconductor industry will move toward vertical integration in the coming decade, strengthening manufacturers and increasing industry concentration. While competition intensifies, demand is also surging, particularly in emerging fields like AI, virtual reality, smart homes, and connected cars. These areas are expected to drive long-term growth and sustain the industry’s momentum.
Private Mould Gaming PC Speaker
Gaming Speaker,Usb Gaming Speaker,Private Mould Gaming Speaker,Gaming Speaker With Knob
Comcn Electronics Limited , https://www.comencnspeaker.com